Amazon Deal with USPS Gives Sellers Unprecedented Discounts

Amazon told sellers on Monday it had negotiated a deal with the USPS so they will see no rate change on the cost of Priority Mail shipping, which will remain at 2015 rates. The deal is unprecedented, since Priority Mail rates increased 9.8 percent on average as of Sunday (January 17, 2016) retail - and an increase of 9.4 percent for Commercial Base pricing, on average.

Here's the announcement that greeted sellers on Monday:

New Negotiated Rates for USPS Priority Mail and Priority Mail Express
On January 17, 2016, new USPS rates will go into effect. Amazon has negotiated discount prices for Priority Mail and Priority Mail Express that are available when you buy shipping through Amazon Shipping Services.

For Priority Mail and Priority Mail Express, for the time being the total shipping costs will remain at 2015 rates.

USPS rates for all other shipping options will increase at public rates.

For more information on buying shipping with Amazon, see the Shipping Services page.

Nothing is easy when it comes to dealing with the 2016 USPS shipping rate changes, however. Some questioned what the phrase "for the time being" meant, wondering if the Amazon deal was temporary. Others struggled to figure out why they were seeing different (higher) rates than their colleagues - that appeared to be due to a function on Amazon that allows sellers to use their Stamps.com account.

"I was having the same problem until I disassociated my Stamps.com account. So you will only see these discounted rates if you disable Stamps.com, ironically enough," a seller wrote to a colleague who was seeing a rate of $5.75 for a USPS Priority Flat Rate envelope instead of $4.90.

But another seller said that while Priority Mail was cheaper when printed through Amazon, Stamps.com offered cheaper rates than Amazon for First Class service. (We have a question in to Stamps.com to confirm this.) Another consideration for Amazon sellers to consider: Stamps.com allows multichannel sellers to manage all of their packages from one dashboard.

Many sellers have been relying on the charts found on Stamps.com to help understand the USPS rate hike. As feared, not everyone was aware that the rates were changing or that the USPS was doing away with online postage-printing discounts for its own USPS Click N Ship service, based on comments on industry discussion boards on Sunday and Monday.

For online postage providers, there's a positive side as online sellers look for tools to help them become more efficient in light of the significant rate hike for some services. Shipping Easy CEO Katie May said her company doubled its sign ups over the weekend and were up 4-fold on Monday versus an average Monday. "The key driver appears to be USPS Rate Changes this weekend as well as Click N Ship moving to Retail. We are drawing a direct correlation and it's very positive."

Online sellers of all sizes are rethinking their shipping carriers/preferences and consequently, their software provider, May said. "For existing customers, it's about fully realizing the impact and reconsidering decisions that made sense last week - but no longer do. We've got a large account management team that is working overtime to help USPS customers fully grasp the changes and make the best decisions for the future. It certainly has online sellers undivided attention!"

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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